Health analysts have criticised the introduction of fines aimed at reducing bed-blocking - arguably the single biggest problem facing the NHS.

Social services departments will face financial penalties if they fail to provide alternative accommodation for patients who are stuck unnecessarily in hospital.

It is a radical and hugely controversial move.

This is the biggest issue facing the health service

Dr Roger Shinton, BMA

However, it is also an acknowledgement of a growing crisis, which some analysts believe is blocking government attempts to deliver improvements in the health service.

A report by the Audit Commission published last year suggested that two out of three patients in hospitals across England are over the age of 65.

There can be little doubt that thousands of these people should not be there.

A similar report by MPs suggested that up to two million bed days might be lost in the NHS each year because of bed blocking.

The Liberal Democrats suggested earlier this year that
the lack of alternative facilities for these patients led to the loss of more than 88,000 operations last year.

Source of problems

The effects of bed blocking are immense and are felt throughout the health system.

Dr Roger Shinton of the BMA believes it is the root of many of the problems in the today's NHS.

"It is a key issue that has caused all of the current problems - people who are sent home too early, patients who don't receive the care they need, operations that have to be cancelled, A&E departments that are heaving. The reason for all of this is there isn't the money to care for these people in the community."

Last year, Dr Shinton who is a consultant physician at Birmingham Heartlands and Solihull NHS Trust brought the issue of bed blocking to national attention.

"Basically the council here in Birmingham was in the red and decided it was not going to pay for the care of these patients.

"The hospitals became choked with patients. Nobody could get in because nobody could get out."

NHS trusts in the city benefited from a £300m cash injection from the government last November but problems continue.

"I think there are about 100 patients in Birmingham who should not be there and I think that is replicated elsewhere in the country," said Dr Shinton. "This is the biggest issue facing the health service."

The government obviously believes its policy of penalising councils will deliver change.

Budget increases

It is has increased social services budgets across England by 6% next year - up from an expected 4% - to help them to meet this challenge.

There is a danger that this system would create a perverse incentive to move people unnecessarily frequently

Dr Gill Morgan, NHS Confederation

The policy, which will be enshrined in legislation, is based on practices in Sweden and Denmark where hospitals can charge social services for the costs they incur for in keeping older people in hospital unnecessarily.

Under the government's plans, councils that manage to reduce bed blocking will be able to divert the extra resources to other services while those that fail will be effectively fined.

In its document Delivering the NHS Plan published on Thursday, the Department of Health said the measure would provide "far stronger incentives in the system to ensure that patients do not have to experience long delays in their discharge from hospital."

Meanwhile, hospitals that discharge patients too early will also be penalised. They will, according to the Department of Health, be "responsible for the costs of emergency hospital readmissions, so as to ensure patients are not discharged prematurely."

But Michael Leadbetter, president of the Association of Directors of Social Services, has warned the policy could backfire on ministers.

"In some parts of the country there are significant problems because of the closure of residential homes or they cannot recruit staff. In other areas, they just do not have the money because their budgets are capped," he said.

NHS concerns

Even NHS managers have their concerns. Dr Gill Morgan, chief executive of the NHS Confederation, urged ministers to tread carefully.

She said: "There is a need for incentives to drive the relationship. However, we need to take care that in implementing models from other countries we minimise any unintended consequences.

"For example, there is a danger that this system would create a perverse incentive to move people unnecessarily frequently."

Either way, ministers appear determined to finally tackle the issue. However, they may have some hard work to do before they convince doctors, managers and social services staff they are taking the right approach.